REG - GreenX Metals Ltd - Update on Arbitration Award against Poland

GreenX MetalsAnnouncement

11/11/2024 07:00

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RNS Number : 6827L  GreenX Metals Limited  11 November 2024

NEWS RELEASE 11 NOVEMBER 2024

Update on Arbitration Award against Poland

GreenX Metals Limited (GreenX, Claimant or Company) provides the following
update on the international arbitration claims (Claim) against the Republic of
Poland (Poland or Respondent) under both the Australia-Poland Bilateral
Investment Treaty (BIT) and the Energy Charter Treaty (ECT) (together the
Treaties).

 

 ·                       On 7 October 2024, GreenX was awarded £252 million (A$495 million/PLN 1.3
                         billion) in compensation and interest after the Tribunal unanimously held that
                         Poland breached its obligations under the Treaties
 ·                       Poland has now lodged a request to set-aside the BIT award, seeking to have it
                         set-aside on the basis of jurisdictional aspects of the award and procedural
                         unfairness
 ·                       GreenX notes that the Polish Prime Minister, Mr Donald Tusk, recently stated
                         at a press conference that:
                         "The case is rather hopeless, because a lost arbitration is a lost
                         arbitration. We have two big cases on our shoulders. The PiS government blew
                         this issue.
                         The Australians, as you know, were promised that their mine would be built
                         there. For years they were misled and later the commitment was withdrawn. It
                         was quite obvious that they would go to arbitration, and it was rather obvious
                         that they would win this arbitration.
                         Speaking frankly, I would most likely, and I cannot exclude that it will go
                         this way, to find the person directly responsible for Poland now having to pay
                         well over a billion zloty if we do not find a legal solution - which I think
                         has very little probability to set aside the award in this arbitration. So,
                         speaking the truth, I will expect my officers to inform the public in the
                         coming days who made a decision or refrained from making a decision with the
                         consequence of these gigantic losses, that is the compensation that we as the
                         Polish State must pay to the Australians." (1)
 ·                       The threshold to succeed on a set-aside motion is very high with vast majority
                         of cases being rejected and interest continuing to accrue at approximately 6%
                         per annum (at today's rates) whilst the set-aside motion is heard
 ·                       GreenX is well funded to defend the annulment with over A$5.5 million in cash
                         reserves

 

The Announcement Contains Inside Information

GreenX advises that Poland has lodged a request to set-aside the award with
the courts of England and Wales in relation to the BIT claim. Poland is
challenging jurisdictional aspects of the award and alleging procedural
unfairness, including in the Tribunal's decision on damages.

The award can only be set aside under very limited circumstances which relate
to a lack of jurisdiction on the part of the Tribunal or serious
irregularities (such as procedural unfairness). These proceedings do not allow
the courts to re-examine the Tribunal's decision on the merits of the case.

The threshold to succeed on a set aside motion in the English domestic court
is very high, with the courts rejecting set-aside applications in the vast
majority of cases.

Commenting on Poland's request to have the BIT award set aside, GreenX Chief
Executive Officer, Mr Ben Stoikovich said "Whilst Poland's actions of lodging
a request for a set-aside of the award are not surprising, we note the recent
comments made by the new Polish Prime Minister, Mr Tusk, and welcome the
opportunity to settle this dispute which will allow both parties to put this
unfortunate episode behind us. The Board of GreenX remains committed to
obtaining payment of the award and returning capital to shareholders."

The Claim was brought under the United Nations Commission on International
Trade Law Rules (UNCITRAL) and the award is final and binding on the parties.
The UNCITRAL Rules do not provide for an appeal procedure i.e., they grant no
explicit authority to a panel to reconsider its award. However, either party
may ask the Tribunal to correct any computational, clerical or typographical
errors in the award, issue an interpretation of the award or render an
additional award on any claims omitted from the final award. These procedures
do not allow either party to request that the Tribunal reconsider the merits
of its decision. As part of its filings, Poland is seeking a correction in the
computation of damages for the awards.

The Company expects that Poland will also apply to set-aside the award in
relation to the ECT claim in due course and it will continue to update the
market, if required, in line with its continuous disclosure requirements.

ENQUIRIES

 Ben Stoikovich

 Chief Executive Officer

 +44 207 478 3900

 

FURTHER DETAILS of THE SUCCESSFUL ARBITRATION AWARDs

In October 2024, GreenX reported a successful outcome of the Claim against
Poland under both the BIT and the ECT with the Company being awarded:

·    approximately £252m (A$495m / PLN1.3bn) in compensation by the
Tribunal under the BIT (BIT Award) which includes interest compounded at SONIA
plus one percentage point (+1%) compounded annually from 31 December 2019 to
the date of the award (7 October 2024).  Interest will continue to accrue at
SONIA +1% compounded annually until full and final payment by the Respondent.

·    approximately £183m (A$360m / PLN 950m) in compensation by the
Tribunal under the ECT (ECT Award), which includes interest compounded at the
SONIA overnight rate +1% compounded annually from 31 December 2019. Interest
will continue to accrue at SONIA +1% compounded annually until full and final
payment by the Respondent.

·    Interest continues to accrue at approximately 6% per annum based on
today's rates (Sterling Over-Night Interest rate (SONIA) plus 1%) until full
and final satisfaction of the award by Poland.

·     Interest of approximately £1m (A$2m / PLN5.2m) has accrued since
the award was made.

·    Both Awards are subject to any payments made by the Respondent to
the Claimant in the other arbitration such that the Claimant is not entitled
to double compensation i.e., any amount paid by Poland in one arbitration
(i.e., ECT) is set off against Poland's liability in the other arbitration
(i.e., BIT).

The compensation is denominated in British pound sterling. No hedging is in
place for the compensation and accordingly is subject to fluctuations in
foreign currency.

Each party was ordered to cover its own legal fees, expenses and arbitration
costs in relation to the Claim, which in respect of GreenX are costs that have
already been fully paid under the Litigation Funding Agreement (LFA) with
specialist arbitration funder LCM Funding UK Limited (a subsidiary of
Litigation Capital Management Ltd) (LCM).

The Tribunal unanimously held that Poland had breached its obligations under
the Treaties in relation to the Jan Karski project, entitling GreenX to
compensation. In respect of the Dębieńsko project, the Tribunal did not
uphold the Claim under the Treaties.

All of GreenX's costs associated with the arbitration were funded on a limited
basis from LCM. To date, GreenX has drawn down US$11.2 million (A$16.2 million
at 30 September 2024) (Outstanding Funding) from the LFA.

In accordance with the terms of the LFA, once the compensation is received,
LCM is entitled to be paid the Outstanding Funding, a multiple of five times
the Outstanding Funding (based on the period since entering into the LFA) and
from 1 January 2025, interest on the Outstanding Funding at a rate of 30% per
annum, compounding monthly.

Net of the payments to LCM, GreenX will pay 6% of the balance to key
management directly involved in the case (as previously approved by
shareholders on 20 January 2021) and 3% to key legal advisers who assisted
with the case on a reduced and fixed fee.

Upon satisfaction of the award, it is GreenX's intention to return the
majority of the available cash to shareholders in a timely fashion, after
payment of the above costs of the arbitration and applicable taxes (if any).

 

Forward Looking Statements

This release may include forward-looking statements. These forward-looking
statements are based on GreenX's expectations and beliefs concerning future
events. Forward looking statements are necessarily subject to risks,
uncertainties and other factors, many of which are outside the control of
GreenX, which could cause actual results to differ materially from such
statements. GreenX makes no undertaking to subsequently update or revise the
forward-looking statements made in this release, to reflect the circumstances
or events after the date of that release.

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this
announcement via Regulatory Information Service ('RIS'), this inside
information is now considered to be in the public domain.

 

(1) sources: https://www.gov.pl/web/premier/wsparcie-dla-rodzicow-wczesniakow
(https://www.gov.pl/web/premier/wsparcie-dla-rodzicow-wczesniakow) (refer to
the video (29:45-32:00)),

 https://biznes.pap.pl/wiadomosci/firmy/unikniecie-wyplaty-odszkodowania-wynikajacego-z-arbitrazu-greenx-malo
(https://biznes.pap.pl/wiadomosci/firmy/unikniecie-wyplaty-odszkodowania-wynikajacego-z-arbitrazu-greenx-malo)
.

 

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